Cash America 2013 Annual Report Download - page 157

CASH AMERICA INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
132
Variable Rate Senior Unsecured Notes
When the Company originally entered into the Credit Agreement in connection with its Domestic and Multi-
currency Line of Credit, it also entered into a $50.0 million term loan facility under which it issued variable rate senior
unsecured notes that are guaranteed by all of the Company’s domestic subsidiaries. When the Company amended its
Domestic and Multi-currency Line of Credit on May 10, 2013, it also extended the maturity date of its $50.0 million
variable rate term loan facility from March 31, 2015 to March 31, 2018 (the “2018 Variable Rate Notes”). The 2018
Variable Rate Notes are payable in equal quarterly principal installments of $2.1 million with any outstanding
principal remaining due at maturity on March 31, 2018. Interest on the 2018 Variable Rate Notes is charged, at the
Company’s option, at either LIBOR (as defined above) plus a margin of 3.50% or at the agent’s base rate plus a
margin of 2.00%. The weighted average interest rate (including margin) on the 2018 Variable Rate Notes was 3.69%
and 3.75% as of December 31, 2013 and 2012, respectively.
In connection with the amendment of the Domestic and Multi-currency Line of Credit and the 2018 Variable
Rate Notes, the Company incurred debt issuance costs of approximately $1.8 million in 2013, which primarily
consisted of commitment fees, legal and other professional expenses. These costs are being amortized over a period of
five years and are included in “Other assets” in the consolidated balance sheets.
$300.0 Million 5.75% Senior Unsecured Notes
On May 15, 2013, the Company issued and sold $300.0 million in aggregate principal amount of 5.75% Senior
Notes due 2018 (the “2018 Senior Notes”). The Company offered and sold the 2018 Senior Notes to initial purchasers
in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”). The initial purchasers then resold the 2018 Senior Notes pursuant to the exemptions from
registration under the Securities Act in reliance on Rule 144A and Regulation S. The 2018 Senior Notes bear interest at
a rate of 5.75% annually on the principal amount, payable semi-annually in arrears on May 15 and November 15 of
each year, beginning on November 15, 2013. The 2018 Senior Notes will mature on May 15, 2018. The 2018 Senior
Notes are senior unsecured debt obligations of the Company and are guaranteed by all of the Company’s domestic
subsidiaries and one of its foreign subsidiaries (the “Guarantors”).
The 2018 Senior Notes are redeemable at the Company’s option, in whole or in part, at any time at 100% of
the aggregate principal amount of 2018 Senior Notes redeemed plus the applicable “make whole” redemption price
specified in the Indenture that governs the 2018 Senior Notes (the “2018 Senior Notes Indenture”), plus accrued and
unpaid interest, if any, to the redemption date. In addition, if a change of control occurs, as that term is defined in the
2018 Senior Notes Indenture, the holders of 2018 Senior Notes will have the right, subject to certain conditions, to
require the Company to repurchase their 2018 Senior Notes at a purchase price equal to 101% of the aggregate
principal amount of 2018 Senior Notes repurchased plus accrued and unpaid interest, if any, as of the date of
repurchase.
In addition, on May 15, 2013 the Company entered into a registration rights agreement with the initial
purchasers (the “Registration Rights Agreement”) of the 2018 Senior Notes, pursuant to which the Company agreed to
use commercially reasonable efforts to cause a registration statement relating to an offer to exchange the unregistered
2018 Senior Notes for identical new notes registered under the Securities Act, on or prior to the 270th day following
the closing date of the issuance and sale of the 2018 Senior Notes. The Company caused a registration statement on
Form S-4 to be declared effective by the Securities and Exchange Commission (the “SEC”) in January 2014 and has
completed the exchange offer.
The Company used a portion of the net proceeds from the 2018 Senior Notes issuance to repay all outstanding
balances under its Domestic and Multi-currency Line, which were $202.0 million on May 15, 2013. The Company
used the remaining net proceeds from the issuance to repay other outstanding indebtedness and for general corporate
purposes.